Wednesday, January 02, 2013

We are told that the only way out for Spain is to accept more austerity in the form of lower wages, lower pensions and more cuts in public services. Last year 800,000 people lost their jobs and this year it looks like another half million will join them. Those that are still employed face the continued threat of wage cuts, sackings or both. To make the misery even worse, Spaniards are seeing a dwindling return on their savings and the value of their homes plummet.

Sure, the country was not competitive at the start of the crisis in 2008. The austerity measures were intended to regain the edge but at the same time they have drawn too many into the poverty trap. By 2022, it is estimated that 38% of the population could be in poverty. Only Bulgaria and Romania have higher numbers of people deemed at risk.

A country that fought hard to progress from its third world status in the 50s looks set to return 60 years later.